Many high school and college students claim that they are not educated about their budget. As a result, they do not tend to consider personal financial management an important skill. In addition, many of them believe that this is irrelevant to them until they receive their first salary for a full-time job. But in reality, everyone has their own personal finances, so they have a budget to manage.
There are many great financial tools and techniques available today, especially for students. Learning about them means taking advantage of this knowledge and then giving yourself the opportunity to enter the job market with confidence.
Top 5 Reasons Why Budgeting Is Important
Budgeting is a great way to start taking ownership of your financial position and it doesn’t have to be complicated. An Excel sheet or a simple notebook will suffice. Here are five reasons to start one:
– You can get a clearer understanding of where your money goes.
– Find the balance between spending and savings.
– Avoid panic in an emergency.
– Small launch Start-up Without debt.
– Adaptation before going deep into the world of rent, loans and debt.
If you are determined, start with the basic steps that everyone should take.
Self-organization is the key
1. Calculate your income
The important thing is to organize yourself well to optimize your financial management. First and foremost, you need to check your expense and income records. Please indicate exactly how much you normally receive. These include monthly scholarships, freelance jobs, and pocket money. If some sources of income are not regular, compare the last 6 to 12 months to calculate your average income.
2. Track spending
Above all, you need to write down all fixed costs such as rent, insurance, textbooks, subscription fees and fees.Then we have variable spending including food, entertainment, clothing and decoration for you dorm room, And everything else. Ideally, you should write down your purchase category and track your spending habits for months. In this way, you will have a clearer image of how you spend your money. These are the categories you may want to include:
– Outdoor dining
– Entertainment (cinema, concerts, festivals, dance classes)
– Hobbies, sports
– University (textbooks, pencils, tablets, books)
– House (tools, ornaments)
– Subscription (streaming service, phone charges)
3. Define financial goals
Keeping track of all your expenses can be a hassle, but doing this a few times can benefit you. Then the most interesting part begins. You will begin to see what consumers are doing and be in control of it.
Suppose you want to buy something expensive, such as a new one. Electronic reader, But you can’t save money because you spend 100% of what you earn. If you analyze your expense report, you may find that you spend as much on eating outside as you cook at home for a week. The strategies for the near future are: Eat out once a week instead of three times and set aside the savings. That’s just one example, but you’ll come up with many ideas for your case. I promised!
Finally, with the numbers in front of you, you can define your financial goals. Experts recommend investing 30 to 70 percent of your income, but you can start with something smaller, like 5 to 10 percent. You can save them for your emergency funds, or certainly set them aside for the purchase of your dreams (or your needs). If you have some dreams, for example, traveling to France, buying a better smartphone, moving to a larger apartment, you can create three separate funds for them. It’s entirely up to you! Remember to define the amount you have to set aside each month (or weekly if needed).
4. Create an emergency fund
No one is safe from an unexpected emergency. Even if you plan and anticipate, unfortunately, you may face unexpected events or accidents that require you to use up your budget. In general, financial institutions recommend having working capital that can cover a salary of 3 to 6 months. However, not everyone can achieve this, and fortunately the situations that require such an amount are very rare. Therefore, for students, it is advisable to start with a prophylactic savings of about $ 1000 to $ 3000, which covers most of the unexpected costs.
Ideas on how to save money by being a student
– Check if the graduate sells old textbooks. If yes, why should I buy a new one?
– If you use the services we provide frequently University treatise writingLook for one that offers student discounts, or ask your classmates who are good at writing essays for help.
– Find out all the free opportunities on campus, including gyms, libraries and counseling. Instead of going to a paid gym, you may be able to follow YouTube (free) videos and enjoy exercising with your friends.
– Watch out for opportunities. Can I apply for a scholarship? Maybe you can volunteer abroad instead of going somewhere expensive for your vacation?
– Don’t buy groceries when you’re hungry. You will buy what you really don’t need.
– Check out the shops and cafes that offer student discounts and select them.
– Check your bad habits: Overdose and smoking are not only harmful but also expensive.
Self-development is the best investment strategy
Following the steps listed above will increase your chances of becoming a successful investor in the future. However, for now, we need to focus on research and personal development as a way to invest in the future. Indeed, the more you focus on developing your hard and soft skills now, the higher your salary will be. Besides, you are more conscious and take ownership of your finances.
Personal financial foundations for students
https://www.insightssuccess.com/basics-of-personal-finances-for-students/ Personal financial foundations for students